Don’t come within five feet of me during a match,” Swansea City’s co-owner Steve Kaplan warns me. “And if we lose, which unfortunately has occurred so far this season quite a bit, it ruins my entire weekend. I’m not a pleasant person to be around.”
Long-suffering football fans will relate. But a few years ago, the softly spoken American, 59, barely watched the game, let alone allowed his mood to be dictated by it. Baseball was Kaplan’s childhood passion. His desire to play at college was cut short when he injured a shoulder by running into another player with enough force to leave the opponent unconscious. Instead, he went into business, founded a private equity firm and amassed a multimillion dollar fortune.
Kaplan never lost the sporting bug though and, in 2012, bought a stake in the Memphis Grizzlies, an NBA basketball team. It was from this vantage point that he first observed the global popularity of a rival sport — football and, in particular, the English Premier League.
Thousands of fans pack out stadiums in Britain but millions more around the world follow the sport on television. These TV viewers power the league’s mind-blowing wealth; its 20 teams each take a share of an estimated £8bn in current broadcasting rights.
“My theory was that . . . the most valuable sports content in the world [is] sitting in the United Kingdom,” says Kaplan.
His hunt to acquire a Premier League club led him to Swansea, a working-class port city of 250,000 people in the South Wales valleys. In June 2016, Kaplan and Jason Levien, 45, general manager of the US Major League Soccer team DC United, led a consortium of American investors who bought a controlling stake in Swansea City. The deal was reportedly worth more than £100m. Kaplan is “by a country mile, the biggest investor”, says a person close to the consortium.
On the night we meet, he is in London for a meeting of Premier League club owners — a group of billionaires and industrialists, oligarchs and sheikhs, playboys and socialites. Kaplan is only the fifth American to become a principal owner of these teams, joining those from Russia, China, United Arab Emirates, Italy, Iran, Thailand — and a handful from England.
Kaplan won’t reveal his endgame, but people close to him say the goal is to double or even triple his investment by building the club’s business, and to sell it at a later stage. He does say that “if we did nothing but stay in the Premier League and didn’t do any of the other pieces [to boost the club commercially], the value of Swansea City would go up because the worldwide rights to Premier League football, which is split equally among the 20 teams, is going to grow at a very substantial compound growth rate over the next 20 years.”
Kaplan, however, has much bigger ambitions for Swansea. He wants to get global sponsors, expand the stadium, upgrade training facilities, sign top international players and attract fans worldwide. This is why over the course of the season, he, along with shareholders, directors, executives and coaches at Swansea, agreed to speak to the FT about their hopes and plans. They gave me unprecedented insight into the modern running of a Premier League club — how rich Americans, the latest big-money foreigners to buy entry into the Premier League, are trying to turn a small-town club into a global operation.
Yet, in November, after 11 games of the season, there is a hitch. The team have won just two matches. Tensions are building. Some supporters are in open revolt, screaming “we want our club back” during matches. Kaplan’s investment, borne out of rational thinking, has failed to take account of football’s capricious nature; that the best-laid plans of middle-aged men depend on the feet of the young athletes.
Each season, the three teams finishing bottom of the Premier League are demoted to the Championship. The consultancy Deloitte estimates that relegation results in a financial hit of up to £95m. “The stakes are so high in the Premier League,” say Kaplan. “It’s perceived by the owners, it’s perceived by the management, it’s perceived by the players, the fans, the support staff. For everybody, they just feel how much is riding on every match.”
And each match is changing Kaplan. “I want to be careful about how I say this. Whether Swansea goes up 10 times in value or goes to zero [is] not going to affect my family or me, [it is] not going to have a material impact on my net worth . . . What I didn’t fully appreciate is how emotionally invested I would be in the team . . . I think it has to do with the fact that it’s so hard to score a goal. The goals are so few and far between that, when you do score, it’s such an incredible emotional release. You can see [it] with [the] players. They score a goal and they’re jumping. They’re sliding on the grass.”
Goals have been the problem for Swansea. They managed just seven in their first 11 league games and no other team had attempted fewer shots. This was predictable. In the summer, having finished 15th last season, the team sold its two biggest attacking stars: Icelandic midfielder Gylfi Sigurdsson and Spanish striker Fernando Llorente. Though replacements were hired, manager Paul Clement pushed for more players. But the owners refused to break the bank. In the summer, Swansea were one of the few top-flight clubs to make a net profit in transfer sales.
This has raised the hackles of fans, who argue a refusal to spend big will doom the team. But Kaplan says: “The best plan is to be sustainable, so that, hopefully, in many, many years — we’re owners here but everybody has a finite lifespan — when we’re no longer here, we’ve got a team that’s sustainable. If it can generate revenue through its commercial operations, that allows it to stay in the Premier League [and] not [be] dependent on some super-wealthy person pouring money into it. I think that’s more of a hope than a plan. A hope’s not a plan.”
The day after we meet, Kaplan travels to watch Swansea play at Burnley, a team with even fewer financial resources. Swansea lose 2-0. One of the goals is scored by Jack Cork, a player the Swans sold in the summer, considered surplus to requirements. Later that night, when highlights of the game are shown on the BBC’s Match of the Day, the camera briefly settles on Kaplan in the crowd. “One of Swansea’s American owners, Steve Kaplan, is watching the game,” says the commentator. “He’s over for what Paul Clement describes as a scheduled visit and there is nothing sinister in his presence.”
In the corridors of the Liberty Stadium, where Swansea play their home matches, Chris Pearlman, 44, glances at a flatscreen TV. West Ham United, another team battling for survival, are beating Chelsea, the current champions, 1-0. “Oh God, that is not what we need,” he mutters.
An upright man with a square jaw, granite eyes and a sharp suit, Pearlman is the comic-book vision of an American business executive. He has the career to match, having worked at ESPN, the TV sports network, and Van Wagner Sports & Entertainment, a US company that works with sports organisations to sell stadium naming rights and sponsorship.
Offered the role of Swansea’s chief operating officer two years ago, Pearlman uprooted his family, bringing his wife who, like him, has “always had a desire to live in Europe”, and two school-age sons from New York to settle in Mumbles, a pretty seaside village a few miles south of Swansea.
Pearlman is the owners’ emissary, charged with morphing Swansea into a modern footballing enterprise. His early moves include a shirtsleeve sponsorship deal with a Silicon Valley firm, opening a “superstore” in the city to sell club merchandise and brokering a deal to take full control of the Liberty Stadium with plans to add up to 10,000 seats to its current 21,000 capacity.
If Swansea are to live within their means, the aim is to increase those means. “That’s money that they can spend and invest in players,” says Pearlman.
Steve and Jason did not buy this club to have it be in the Championship. Our ambitions are all kind of predicated with us being in the Premier League
These efforts may do little to close the financial gulf with the game’s true heavyweights. In their latest accounts, Swansea’s commercial revenues were £10.7m. At Manchester United, a club that attract scores of blue-chip international sponsors, the figure is £279.5m. Smaller clubs such as Swansea are stuck on a hamster wheel. Only by staying in the Premier League, where all teams are handed about £100m in broadcasting rights each year, can it afford the players to stay in the Premier League.
To break this vicious cycle, Pearlman wants to appeal to fans beyond the city. In one of his more ambitious initiatives, he employed a London-based “branding agency” to create an advertising campaign called “Grit and Beauty”. The motto relates to the toughness of a post-industrial city embedded within the glorious Welsh countryside; the grit of a team that fight their rivals, while playing the beautiful game in a beautiful way.
During a recent pre-season tour to the US, the slogan was slapped on to billboards in Raleigh, North Carolina, and Philadelphia, Pennsylvania. The message is meant to be turned into hashtags on social media. When I express bemusement at the idea, Pearlman says earnestly that Swansea have an opportunity “to capitalise on the broad global exposure of the league”.
Even so, this strategy requires that the club retain their top-tier status, as only then will Swansea matches continue to be beamed into homes in more than 200 countries. “Steve and Jason did not buy this club to have it be in the Championship,” says Pearlman. “Our ambitions from a brand growth perspective, and everything else, are all kind of predicated with us being in the Premier League.”
Pearlman takes me into the executive suite, where directors and senior staff tuck into a buffet lunch on linen-clad tables. Hostesses in red dresses buzz around. It is an hour before Swansea will play West Brom, another relegation-threatened rival. The mood is dark. In the earlier game, West Ham held on to their lead to beat Chelsea, leaving Swansea stranded at the foot of the table.
The mood gets darker when team sheets are handed out. Tammy Abraham, the club’s then top scorer, is left out of the starting 11, chosen as a substitute. Renato Sanches, a highly rated youngster loaned from German champions Bayern Munich, is not even in the matchday squad. I’m told if Swansea are beaten, the manager Clement will be sacked. “Today is very critical, very critical,” says a senior club executive. “They can’t lose today.”
In the first five seasons following their promotion to the Premier League in 2011, Swansea finished no lower than 12th, comfortably above the relegation zone. Their performance defied a rule of football; that the best predictor of a club’s success was how much they pay players. When Swansea were promoted, they had the lowest wage bill in the division. Yet under managers such as Brendan Rodgers, the club developed an attractive style of high-possession, short-passing football dubbed “The Swansea Way”, which enabled them to punch above their weight.
Still, the longer Swansea stay in the Premier League, the less they remain a plucky underdog. The league’s riches have transformed the club, with revenues placing it just outside the wealthiest 30 in the world. They spend the vast majority of their income on paying players.
In 2016, Swansea had the 13th highest wage bill in England’s top division. To be relegated, the club would have to underperform their peers. But over time, the team have lost their “Way”, keeping the ball less, playing fewer short passes, more long balls — just like most other Premier League sides. The beautiful football that once distinguished Swansea from their rivals has dissipated.
At kick-off, I take a seat in the director’s box to watch the match alongside Pearlman and his family. During the first half, a pair of club officials nearby begin an expletive-filled commentary in thick Welsh accents.
“This is a terrible game, it’s going to be like this throughout isn’t it?” says one.
“F***ing get it forward,” says the other.
“Don’t f***ing lose the ball there!”
“No shots yet? F***ing typical”.
In the second half, The Swansea Way, abandoned all season, makes a brief return. The team pass their way into a position of superiority. The crowd, once hostile, now applaud. In the 81st minute, captain Wilfried Bony smashes the ball into the net. The stadium erupts. Pearlman, whose face has been fixed in a scowl, lets off a primal scream. The game ends. Swansea win 1-0 and swap places with West Brom to move off the foot of the table.
“One goal, it changes things,” beams Pearlman after the match. “I’ll watch Match of the Day tonight and there is some sunshine behind those clouds, you know?”
The optimism dissipates after two more matches, both defeats. Clement is fired five days before Christmas. He blames the owners for not spending enough to improve the team.
“Swansea’s investment is clear over the past five or six years — it is the lowest [in the league],” says Clement in an interview with The Times. On a transatlantic phone call, I ask co-owner Levien about the criticism. “The numbers show that since we got involved with the club and took stewardship of it, we’ve invested more money than we’ve certainly brought back in player transfers and wages,” he says. “One thing that is true, and I think that we all share some blame for, including Paul, is that I don’t think we had a tremendously strong transfer window last summer.”
Clement, a former assistant coach at European superclubs such as Chelsea and Bayern Munich, is the third manager the owners have sacked in 18 months. Kaplan also admits to mistakes. Soon after the takeover in 2016, Swansea replaced the Italian coach Francesco Guidolin with Bob Bradley, a former US national team coach with no previous experience of managing in Europe’s top leagues. When I ask about the “Bob Bradley era”, Kaplan jokes: “Is 89 days an era?” That was the period of time it took for Bradley to be fired following an atrocious series of losses.
The departure of Clement, who saved the club from relegation last season, is another learning process for the owners. Levien says they will invest more in scouts and statisticians as they “refine our process around player recruitment”. More urgently, they need to find another new manager.
On Christmas Eve, Carlos Carvalhal left his position as manager of Sheffield Wednesday in English football’s second tier. Soon after, his phone began to ring with job offers from clubs in England, Japan and the US. But it was a call from Swansea, with an opportunity to manage in the Premier League for the first time, that got his attention. Within days, he was hired.
We meet at Swansea’s training ground in Fairwood, a 20-minute drive from the city centre. The facility, with sleek gyms and perfectly prepared pitches, cost about £10m to build. Prior to its construction two years ago, players trained at a nearby health centre, mingling with locals in communal changing rooms and showers. The US owners say this is evidence of how they are investing in the club.
Carvalhal, 52, who has spent much of his two-decade coaching career in his native Portugal and in Turkey, has made a big impression at Swansea thanks to a penchant for colourful analogies. “We were deep in the ocean, where it is very dark and just stones, no fishes,” he told reporters about Swansea’s predicament when he first arrived. Replacing defenders for attackers in one match is “putting all the meat in the barbecue”. After a strong defensive performance against Liverpool, Carvalhal explained: “If you put a Formula One car in London in traffic, the Formula One car will not run very fast.”
More importantly, Carvalhal led Swansea on a 10-match unbeaten run. There have been tactical tweaks, such as using five defenders instead of four, and picking out-of-favour players such as Jordan Ayew and Sam Clucas, who have responded by scoring goals. “My style all the time is very positive,” he tells me. “I like offensive teams. I like balanced teams [that] try to manage the game with the ball.”
Has Carvalhal been told of the owners’ grander vision, of seeking worldwide adoration, spreading the gospel of Grit and Beauty?
Players don’t want to come to our team because they are afraid [we will be] relegated and the value of the player will decrease. It is the reality
“No, because we are in the emergency plan,” he says. “I’m in the centre of the operations of the emergency plan. I’m in the middle of the work and when you’re in the middle of the work, you are caring about your soldiers and the battle and so on. It was not the time to talk about different things. You must understand that we’re still in a critical situation.”
A cerebral type — he suggests our next conversation must involve a debate on the politics of Donald Trump and the philosophy of René Descartes — Carvalhal expresses dismay at the way money has infected the game. Take, for example, the recent January transfer window, a period in which teams are able to acquire new players.
Swansea were desperate to bolster the team. He says the club approached between 10 and 15 players but managed just two signings. Most refused to come, says Carvalhal, because they fear the financial impact of relegation. Players face a salary cut if the club are demoted. Moreover, footballers fear the ignominy of relegation on their CV will hit their worth in the transfer market. That could damage their potential future earnings.
“Most of the players don’t want to come to our team because they are afraid that the team will [be] relegated and the value of the player will decrease,” he says. “It is the reality.”
It is another hamster wheel. The players required to stay in the Premier League will only come to Swansea if the club are capable of staying in the Premier League. “It’s a deep problem, probably it’s a structural problem,” says Carvalhal. Short of spending more money on players, can the manager suggest a solution? “I don’t know,” he says. “I’m in the emergency plan.”
Alan Lewis and Stuart McDonald have seen Swansea rise, fall and rise again. Both retired and in their sixties, they followed the club during the 1970s and 1980s. Back then, led by manager John Toshack, the team rose from the fourth division to the top flight. And they were in the crowd of beery young Welshmen at the club’s ramshackle former ground as Swansea plummeted all the way back down to the bottom division again a few seasons later.
“Even in those dark times, with only 2,000 fans and what have you, the Swans still managed to win one trophy,” says Lewis. “The worst toilets in the Football League.”
We gather at the Landore Social Club, a private members’ institution decked with red pub carpets that demands a 20p entrance fee. Outside is a view of derelict chimney stacks from long-defunct factories, with the gleaming Liberty Stadium in the distance.
Fans here are in jovial mood, despite having just returned from watching Swansea be routed 3-0 by Tottenham Hotspur in the quarter finals of the FA Cup, a knockout competition. What really counts is the ream’s recent resurgence in the Premier League. Continued good results are not taken for granted.
“I think [Kaplan and Levien] thought they were buying something a little more established and stable in the Premier League than we actually are,” says McDonald. “You go away from the top eight clubs — the next 12, any three of those can get relegated.”
The two men lead the Swansea City Supporters’ Trust; Lewis is chairman, McDonald is treasurer. They describes themselves as “custodians” of an institution with a modest mission: to ensure professional football continues to be played in the city. That was in doubt when the group was founded in 2001, with volunteers collecting money in buckets to help keep the club afloat. The same year, Tony Petty, a mustachioed businessman with a cockney accent, bought the club for just £1. His first act was to rip up the contracts of the six highest-earning players, temporarily halting the club’s losses but destroying any hope of the team’s progress.
The fact that we’ve survived seven years in the Premier League is a pretty minor miracle
The trust joined forces with local business owners to buy Petty out, handing over a plastic bag filled with £20,000 in cash to seal the deal. They stabilised the club’s finances and persuaded the local council to help fund the building of the Liberty Stadium, their small but modern home, which opened in 2005. To this day, the trust retains a 21 per cent shareholding and has a director on Swansea’s board — the sort of direct involvement in club affairs that is the envy of rival supporters at other Premier League sides.
The model of joint ownership was blown apart when the Americans bought out the local businessmen to take effective control. The trust insists it was only informed of the takeover at a late stage. “We felt, and the fans felt, we were excluded from the sale,” says McDonald.
Talking to Swansea supporters in recent months has felt like intruding on a blazing family row. Lewis is the trust’s third chairman this season, the other two having resigned in the fallout among fans about how to respond to the change in ownership. A splinter supporters’ group has been formed, while the trust itself has called for the resignation of Huw Jenkins, the club’s chairman, who led the sale. Negotiations to sell some or all of the trust’s shareholding to the US owners have broken down. This discord has only been exacerbated by the travails on the pitch.
The Premier League has lifted the town and the sense that the club are regressing concerns locals. In the match against Tottenham, the stadium was filled with scores of South Koreans who travelled specifically to watch two of their country’s footballers, Swansea’s Ki Sung-yueng and Spurs’ Son Heung-min. If it weren’t for these players’ exploits being televised in Asia, Koreans are unlikely to have come to buy Swansea shirts or eat at one of the restaurants on the city’s high street, which appears to have as many boarded-up shops as open ones.
“With Swansea, we’re end of the line,” says McDonald. “Economically, we’re one of the most deprived regions in the whole of [Europe] . . . We’ve only really got two things going for us in Swansea, one is the football club, the other is the university. We’ve got no industry left here . . . places like the pubs, the clubs, the hotels, when you’re in the Premier League, people come down for the weekend.”
These leaders of Swansea City — Kaplan and Levien, Lewis and McDonald — come from either end of football’s spectrum. The Americans want to profit by helping Swansea rise. The Welshmen hold a safety net should the club fall. “I always say to people, the fact that we’ve survived seven years is, in itself, a pretty minor miracle really,” says Lewis.
But football is a game of miracles. The sport enthrals because matches are unpredictable. There are seven games to go. Written off as relegation fodder at Christmas, Swansea are just a couple more wins, a few more goals, from survival. The desire for another season in the Premier League unites the boardroom, dugout and stands.
“There is a level of intensity that you don’t see in the US to some degree because of relegation,” says co-owner Levien. “Every club wants to bury the others, and that’s the fun part of sport. That’s what I felt like we signed up for.” Then he adds: “I enjoy the highs. I don’t like the lows.”
Murad Ahmed is the FT’s leisure correspondent
Data used in this article and in the graphic were provided by Opta Sports
Follow @FTMag on Twitter to find out about our latest stories first. Subscribe to FT Life on YouTube for the latest FT Weekend videos
Copyright The Financial Times Limited 2018
2018 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.
